Low-cost cancer cover policies are being launched by major insurers - but you need to be aware of some nasty small print before you sign up.

If you get cancer, some of these cheap insurance contracts have exclusions that mean they won’t pay out — for example, you can’t claim the full amount if a family member has had treatment for the disease.

French insurer Axa is the latest big name to launch a cancer-specific policy called Cancer CashCover.

Warning: If you do get cancer, some cheap insurance contracts have exclusions that mean they may not pay out

The policy costs from £5.99 a month, but rises depending on how much cover you want, your health and your age. For £5.99 a month you will get a £15,000 cash payment if you are diagnosed with cancer.

For £7.99 you get £30,000 and for £9.99, £60,000. This cash is intended to cover living expenses, travel and childcare costs, rather than medical treatments.

On top of this it will pay out an unlimited amount if you have been prescribed treatment by a specialist that you can’t get on the NHS.

But from the age of 31 premiums start rising, and smokers pay more. By the time you are 55, costs are £23.85 a month for basic cover, and £65 for the £60,000 payout. A 55-year-old smoker would pay £36.35 a month for basic cover and £99.99 for the maximum £60,000.

Earlier this year, U.S. giant AIG Direct launched a breast cancer insurance policy for 99p a month — or £1.99 for its premier cover.

It offered a one-off payment of either £10,000 or £25,000 and a further £50 for each day you spend in hospital within the first 90 days of being diagnosed.

But while these policies may seem very cheap, particularly for younger people, they are often littered with nasty catches.

Axa’s Cancer CashCover plan limits payouts to half if your mother, father, brother or sister have suffered cancer. You are also not covered for claims made in the first three months after taking out the plan.

Protection, but is it enough? Our story on the 99p policies

And the policy won’t cover all conditions — such as early-stage prostate cancer.

Thanks to advancements in medicine, doctors increasingly spot potentially dangerous cells before they develop into full-blown cancer — known as ‘pre-malignant cells’.

If a doctor identifies these cells, they can often act swiftly to remove them and provide treatment to ensure they don’t come back.

However, Axa’s policy will not pay out to people diagnosed with pre-malignant cells.

It will also refuse to cover you for an early form of cancer called ductal carcinoma in situ.

This is a less advanced type of cancer, but treatment for this particular diagnosis can be invasive.

Women diagnosed with carcinoma in situ in their breast, for example, usually require surgery to remove the dangerous cells and in many cases have a mastectomy.

They will then later need more surgery to reconstruct the breast. Yet they will not receive any help from the insurance.

If you are diagnosed with skin cancer — with the exception of the more serious melanoma — you will only get a £1,000 payout regardless of the level of cover you have.

Currently, one in three people will contract cancer during their lifetime — around 910 people are diagnosed in the UK every day.

Insurers say cancer accounts for around 65 per cent of the total number of claims made with more general critical illness insurance policies.

The next most common conditions are heart attacks, strokes and multiple sclerosis — making up a further quarter of all claims.

Because of these statistics, many people might find a comprehensive critical illness policy, which covers more than just cancer, may be a better option. They typically cover around 40 conditions including cancer, heart attack and stroke. They can also be relatively cheap.

Critical illness cover almost always comes with life insurance on top, which will pay out a lump sum to your family should you pass away.

At the time the Axa policy was launched, a 35-year-old non-smoker could have got £29,812 of life and critical illness cover for just £10 a month with Aegon, according to life insurance adviser firm Lifesearch.

And this price is guaranteed to stay the same for 20 years.

Check the terms and conditions: Some policies may have exclusions in the small print that you weren't expecting

Not all types of cancer are always covered — less-advanced cases such as non-life-threatening skin cancer are often excluded.

However, most insurers will make at least a partial payment if you are diagnosed with an early stage of cancer.

A spokesman for cancer charity Macmillan says: ‘If you are considering taking out a cancer insurance policy, we’d urge you to look at the risks and benefits that the policy could deliver.

‘Some cancer insurance policies will only cover certain or specific types of cancer and not others, and you may not be covered for other long-term health conditions which could develop as a result of your diagnosis’.

A spokesman for Axa says: ‘We recognise that many people are not in a position where they can afford “traditional” comprehensive medical insurance, which covers the cost of diagnosis, hospital treatment and follow-up care.

‘That’s why we have looked beyond traditional medical insurance in developing a lower-cost plan, starting at under £10 a month.

‘With simple underwriting questions for applicants and no medical examination required, we believe it will appeal to those who may have considered other forms of health and protection cover but decided — either because of cost, complexity or exclusions — that it was not for them.’